since 1890 but once-in the critical year of 1893. Normally the excess of exports amounts to hundreds of millions of dollars annually; it reached its highest figures in 1898 ($615,000,000), in 1901 ($664,000,000), and in 1908 ($666,000,000).*

Evidently the foreign commerce of the United States has not only grown, but its character has undergone radical changes. In the earlier part of the era under discussion the United States was a borrowing country. It needed the supplies, the machinery, the capital of Europe for investment in developing or exploiting its natural resources, and it paid for them in securities of its many enterprises, while at present it has an enormous industrial surplus which it must dispose of in foreign lands as well as a financial surplus which is frequently forced to look for investment abroad.

It is quite evident, therefore, that the conditions of the export and the

To be sure the excess of exports over imports as shown in the above figures is somewhat exaggerated owing to the methods employed in the statistics of foreign commerce. This is no place to go into a technical analysis of statistical methods, but it may be pointed out that the value of imported goods is usually taken at the place of shipment and that the high cost of transportation must be added to obtain their actual value on reaching American markets. In addition, such factors must be taken into consideration as the natural tendency toward undervaluation of imported goods, of which sufficient evidence has been disclosed in the recent reorganization of the New York Custom House by the collector, and even the unknown quantity of goods smuggled into this country, also larger than was suspected. With all that, however, there can be no doubt as to the large excess of exports over imports.

import trade are closely connected, but for convenience sake it is preferable to discuss them separately. Of the two currents of trade, the outward and the inward one, the former is more characteristic of the conditions of production and the latter of consumption. The export trade is therefore more significant of the economic growth of this country.

The very rapid growth of exports during the last half century has already been mentioned. In the decade before the war it fluctuated between two and three hundred million dollars annually. The economical disorganization of the war period reduced it to less than $160,000,000 in 1864. It reached $393,000,000 in 1870 and since then its growth has been steady, though interrupted by declines of slow duration in such years of economic depression as 1885 and 1895. most phenomenal growth began during the 15 years following the latter crisis. Thus there were two well-defined periods of export growth; the first at the close of the 70's and the beginning of the 80's, and the second during the decade following the Spanish War.

The

But the economic significance of these two high-water marks in the development of exports was vastly different. In the early period of the 70's and 80's the exports consisted mainly of agricultural and mineral products. In the language of official 'commercial statistics, they consisted mainly of foodstuffs either "in crude

condition " or "partly or wholly manufactured," and of "crude materials for use in manufactures." The exports represented a primitive form of economic exploitation of the natural resources. They followed the opening of the West and the rapid increase of railroad mileage, which in the 20 years following the Civil War (1866 to 1886) had grown from 36,000 to 136,000 miles.

A very interesting analysis of the exports of foreign products from the United States during the last 60 years was published a few years ago by the United States Department of Agriculture, presenting figures which are of deep significance in interpreting the economic development of this country. In 1856 to 1860 farm products constituted 82.4 per cent. of the total exports from this country; in 1881 to 1885, 78.1 per cent.; in 1896 to 1900, 66.2 per cent.; and in 1906 to 1908, only 56.4 per cent. The comparison is evidently interesting but the percentages alone are not conclusive. In absolute figures it means that, barring the turbulent period of the Civil War, the average annual export of farm products had increased from $240,000,000 in 1866 to 1870 to $605,000,000 in 1881 to 1885. But even this comparison of the volume of foreign exports in dollars and cents is not altogether accurate, because the period of the 70's and 80's was a period of a constantly falling crisis in foreign products which the bulk of American exports has helped to

create. Translated into simple English, these statistical computations show that in 1881 to 1885 the raw cotton alone, for instance, constituted nearly 30 per cent. of the total exports as measured in value, and wheat-flour over 20 per cent., pork and lard another 10 per cent., and corn about 5 per cent.- these four articles alone (cotton, wheat, corn and pork) representing three-fourths of the exports from the United States.

The recent industrial development has greatly modified this character of the export trade. Of course, the careful observer must be warned against the wild exaggerations indulged in by many superficial writers on this subject. Despite the very rapid growth of our manufactures, the United States is still the most important agricultural country in the world. Notwithstanding the very rapid growth of cities, between three-fifths and two-thirds of the American people still live in country districts. One-third of the American people still till their land. Notwithstanding the rapid growth of cotton mills throughout the South, we still remain the main source of supply of raw cotton for the whole civilized world, exporting twothirds of our cotton production in its raw state. But these warnings are given only to gauge properly, not at all to deny, the effects of the industrialization of the United States upon its export trade. They are given to show that, side by side with its industrial growth, the development of

agriculture was significant, even if it could not keep pace with the former. A further agricultural growth within the next half century equal in dimension to that of the last 50 years is scarcely to be expected. We still feed and clothe many millions in Europe, but the greater portion is required for our own consumption. This is especially noticeable in the production and export of wheat. In the five years 1900 to 1904 we produced, on an average, 625,000,000 bushels of wheat and exported 192,000,000 over 30 per cent. In the subsequent five years (1905 to 1909) we produced an average of 656,000,000 bushels and exported 113,000,000 bushels or a little over 17 per cent. Furthermore, the method of exporting wheat has undergone a very important change. In 1880, for instance, 85 per cent. of the export of wheat was in grain and 15 per cent. in flour, while within recent years flour constituted from 40 per cent. to 60 per cent. of the export of wheat (even disregarding 1905, the year when the exports of wheat and grain owing to a very short crop ceased almost entirely and flour constituted 90 per cent. of the total exports of wheat). Thus, even though the total volume of exports of food products has not declined, its character has changed greatly and its fluctuations are greater owing to constant and growing domestic demand. In 1880 the total exports of foodstuffs were $465,000,000; in 1890, $357,000,000; in 1900, $545,000,000 and in 1910, $369,000,000. But, in

proportion to the total trade, the decline was uninterrupted. In 1880 foodstuffs represented 56 per cent. of the total value of the exports; in 1890, 42 per cent.; in 1900, 40 per cent. and in 1910 less than 22 per cent.

On the other hand, the exports of manufactures rapidly increased from $122,000,000 in 1880 to $169,000,000 in 1890, $485,000,000 in 1900, and $767,000,000 in 1910. Where the sailing ships of 30 or 40 years ago carried only agricultural or mineral products, the transoceanic steamers carry products of a high degree of manufacture intended either for further use in manufactures of other countries or all ready for consumption, the latter higher group representing about twothirds of the total exports of manufactures. It is quite impossible even to enumerate the important groups of manufactured articles, some of the exports of which have grown so rapidly as to roll up the enormous total of $767,000,000 in 1910 against less than $50,000,000 in 1860. Perhaps the small table given at the end of this article will be the best way of showing the rate of growth for the most important of these articles.

A glance at this table will show that the change which has taken place is in harmony with that in the export of wheat. Instead of sending the raw materials so abundant in this country, they are worked up to a more advanced and sometimes to their final form. Instead of wheat, flour; instead of corn and oats, beef and pork;

instead of raw leather, shoes; instead of lumber, complicated office furniture; instead of raw iron, machinery, bicycles, typewriters or scientific instruments. This, in a few words, is the change in the export trade in this country, and this undoubtedly is the growing tendency of the future.

And since the manufactured products have largely substituted the raw material in this trade, it is quite natural that the currents of the exports from the United States should not have radically changed. From the very beginning of the foreign commerce of the United States, from twothirds to three-fourths of the exports went to Europe and over two-thirds still continue to cross the Atlantic. Nevertheless, under the influence of the changed character of the exports, some changes in the current of trade were inevitable. On the one hand, the substitution of manufactured products for food and raw materials inevitably caused some difficulties in the European markets where the products of American factories were forced to meet the competition of the products of domestic factories; and, on the other hand, it opened markets in such countries as were of no importance as consumers of American exports heretofore, either because they had a surplus of food products of their own or because they had no demand for the particular foods or raw materials which the United States could offer. As a result, we find an increased pro

portion of the American exports diverted from Europe to the South American and Asiatic countries. Thus in the five years (1866 to 1870) Europe absorbed 77.8 per cent.; North America, 13.5 per cent.; South America, 4.2 per cent.; Asia, 2.7 per cent.; Australasia, 1.4 per cent. and Africa but .5 per cent. of the American exports. In the last five years, however, North America's share has increased to 18.5 per cent.; South America's, to 4.5 per cent.; Asia's, to 4.9 per cent.; that of Australasia, to 2.4 per cent.; and Africa's, to 1 per cent.; correspondingly, then, Europe's share has declined to 68 per cent. If figures did not make such dull reading, it would be possible and instructive to show that the share of the extra European countries is very much larger when only manufactures are considered. This analysis does not mean, of course, that our trade with Europe has actually declined, but only that, as manufactures are substituted for raw materials in the export trade, the markets of the younger countries less advanced industrially have become proportionately more important, and it is upon them that international rivalry is concentrated.

It was shown above that the imports into the United States had not grown as rapidly as the exports. Nevertheless they have increased faster than population and now do so more uninterruptedly, notwithstand

ing all the important changes in tariff policy. The sudden decreases in the early 70's (from $642,000,000 in 1872 to $461,000,000 in 1876), again in the 90's (from $866,000,000 in 1893 to $654,000,000 in 1894), and finally from $1,434,000,000 in 1907 to $1,194,000,000 in 1908, were due to periods of economic depression rather than to changes in the tariff. Within the most recent years imports have increased in face of the considerable drop in the exports, so that the balance of trade has declined from $666,000,000 in 1908 to $188,000,000 in 1910.

These few data will indicate the growing importance of the import trade, which is frequently disregarded by writers on questions of foreign commerce. It is true that, with the rapid growth of American industries, the United States is becoming very much more self-sufficient than it was, inasmuch as our industries are better able to satisfy the demands of the internal markets. The most telling demonstration of this is found in the fact that, while early in the Nineteenth century more than one-half and sometimes nearly three-fifths of the imports consisted of manufactured goods ready for consumption, by the beginning of the new era (that is after the Civil War) the proportion has declined to 40 per cent. and now constitutes less than one-fourth, while the imports of raw materials for the use of manufactures has increased from 10 per cent. in the 60's to over

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one-third. Adding to these the imports of partly manufactured articles for further use in manufactures, over one-half of the imports into the United States is called for by the demands of American industries. Contrary to some alarmist statements, the importation of food products has not increased, relatively speaking, and the time is still far distant when the United States will become dependent upon a foreign food supply excepting for such articles as, say, sugar or coffee, for whose importation a good climatic reason exists. In this connection we may point to the most interesting analysis to be found in the report of the chief of the Bureau of Statistics of the Department of Agriculture for 1910, which shows that, owing to improved methods of agriculture, the production of foodstuffs on the American farm is actually growing faster at present than the population.

For this reason the sources of the import trade of the United States are more evenly divided among the continents than are those of the exports. Less than one-half comes from Europe (the proportion within the last 25 years having gradually declined); about one-fifth comes from the other North American countries; about 15 per cent. from Asia; and 10 to 12 per cent. from South America (the respective shares of the last two regions having materially increased within recent years). Of articles for im