The noticeable features of the record of American exports for the last eighty-two years are that the export of food-stuffs has decreased rather than increased in proportion to business in other commodities; that the export of crude manufactured material has greatly decreased, and in fact, with the exception of cotton, has become a negligible quantity; and that the export of manufactured goods ready for consumption has increased enormously. Exports of cotton are now the basis of American export of raw material. Whereas the total production of cotton in the United States in 1830 was only about 1,000,000 bales, in 1912 the United States furnished nearly 11,000,000 bales for export, valued at $625,000,000, amounting to fully five sixths of the value of all raw material for manufacturing purposes exported by the United States in that year.
The export of raw cotton in the case of the United States does not mean any appreciable backwardness of home manufacture. The importations of manufactured cotton goods are decreasing annually, so far as cloths are concerned. In 1912 less than $8,000,000 in cotton cloth was imported from abroad. The heaviest importation of cotton goods was in laces and such other things as are specialties of foreign manufacture, in many cases hereditary trades, or trades dependent upon cheap, trained female labor, such as is not available in America. America uses nearly 6,000,000 bales of home-grown cotton every year in her own factories, and supplies not only the home market with manufactured goods, but manufactures more than $30,000,000 worth for foreign sale, in competition with the great spinning and manufacturing countries of Europe. The growing of cotton is not a raw-material industry in the strict sense of the word, for, owing to peculiarities of climate, certain features of the American labor supply, and the great amount of money this staple crop brings from abroad and distributes in non-manufacturing districts, it possesses a peculiar and great economic value to the country. Coal, tobacco, petroleum, and timber are the more important of the crude materials exported from the United States in addition to cotton; but the total value of all these is, as stated, about one sixth of the whole.
The total value of the exports of domestic merchandise from the United States in 1912 was about $2,363,000,000. As stated, cotton stands at the head of the list. The iron and steel industry comes next; the farmers of the United States furnish the third largest amount of merchandise for export; and machinery of all kinds, oils, paper, fruit, and chemicals, are the leaders in American export. The most interesting changes that have taken place in American foreign trade in the last few years are those that indicate certain possibilities of the future; in fact, they are in a way prophetic of what is to happen in the economic life of the nation. In 1902 93,000 head of cattle were imported, and in 1912 the importations numbered 325,000. In 1902 about 327,000 head of cattle were exported, and in 1912 only about 46,000. This means that the American people have nearly reached the point where the home market absorbs all cattle grown in the country, and that in future other peoples, who in the past have been dependent upon the United States for their beef supply, must look elsewhere. The exportation of bread-stuffs has decreased materially, while importation has quadrupled, thus telling a story of shortage in food-supply, as did the change in the cattle movement. This same shortage is shown in like changes in the trade in meat products, dairy products, eggs, and nearly every other variety of staple food.
The United States produces half the copper of the world, but both exports and imports of this metal are increasing, showing that other countries are sending copper to this country for treatment. In 1902, America imported 135,000,000 pounds of tin plates, and in 1912 only 4,500,000 pounds. The exports of tin plates increased during the same period from 3,500,000 pounds to 183,000,000 pounds. Iron and steel show a marked decline in imports and an enormous gain in exports. The American people are no longer importing automobiles to any extent, but are increasing their sales abroad, and in 1912 sold $28,000,000 worth to foreign buyers. The importations of coffee virtually hold their own, amounting in 1912 to nearly 1,000,000,000 pounds; but owing to increased prices, the value of this importation is nearly double that of 1902. The exports of the iron and steel industry of the United States, including the manufactures of these materials as well, now amount to about $1,000,000 per day. Europe takes the higher class of goods, and Canada and South America take the rails, structural iron and steel, heavy castings, and other like products that constitute the heavy tonnage of the industry.
The countries taking their largest proportionate share of their imports from the United States are: Haiti, 69 per cent.; Honduras, 68 per cent.; Canada, 62 per cent.; Santo Domingo, 61 per cent.; Panama, 56 per cent.; Mexico, 55 per cent.; Cuba, 53 per cent.; and Costa Rica 51 per cent. England takes 17.3 per cent. of her imports from the United States, Germany 13.3 per cent., and France 8.6 per cent. Of the South American countries, Colombia, Ecuador, Venezuela, and Peru take from 20 to 30 per cent. of their imports from the United States, while others take smaller percentages, ranging from the 13.8 of Argentina and the 12.8 of Brazil to the 2.8 per cent. of Bolivia. Other countries draw very slightly upon the United States for their imports, notably China, which takes only 5 per cent.; India, 3 per cent.; Morocco, less than 1 per cent.; Servia, 1 per cent.; and about the same for Turkey and Rumania. The great markets for American products at the present, in total value of goods sold to the peoples of these countries, are England, purchasing as she does from America goods to the amount of $572,000,000; Canada, $285,000,000; Germany, $283,000,000; France, $119,000,000; the Netherlands, $117,000,000; Italy, $70,000,000; Cuba, $57,000,000; Mexico, $56,000,000; Russia, $52,000,000; Austria-Hungary, Argentina, and Belgium, between $45,000,000 and $50,000,000 each, and Australia, Brazil, and Japan, between $27,000,000 and $32,000,000 each.
Of the export trade of the United States, 60 per cent. goes to Europe, 23 per cent. to North America, 6 per cent. to South America, 5 per cent. to Asia, 4 per cent. to Oceanica, and 2 per cent. to Africa. American producers send more than 90 per cent. of their entire foreign shipments, or more than $2,000,000,000 worth of goods, to nineteen countries, and the remaining ten per cent. covers the trade with all the rest of the world. England buys about 26 per cent. of the total American export; Canada 15 per cent.; Germany 13 per cent.; France 7 per cent.; the Netherlands 4 per cent.; Italy, Cuba, and Belgium, each 3 per cent.; Mexico, Japan, Argentina, Australia, Russia, and Brazil, each 2 per cent.; and Spain, Austria-Hungary, Panama, China, and the Philippines, each about 1 per cent.
Official figures of imports and exports are useful as indications from which deductions may safely be drawn, but they are not an accurate record of the trade relations of any two countries. In some cases the indirect trade of the United States with certain countries is much larger than custom-house figures would indicate, in that American goods are purchased by other nations, who act as distributors or intermediaries in conducting the foreign trade of the world. This is very largely so in American trade with England. That country is credited with purchases of American goods far in excess of the needs of the British people. These goods are bought by English firms whose dealings are largely with other foreign countries, and by them sold to their customers on the Continent of Europe, in Asia, Oceanica, or elsewhere. A striking example of this is the American trade with Russia. It is impossible to state exactly the value of American goods which in time find their way to the Russian consumer, but it is vastly in excess of the amount of trade between the United States and Russia, or $52,380,000, as given in government statistics. In the official statement of exports of American cotton, Russia is credited by the Department of Commerce figures as receiving 64,590 bales, valued at $3,796,867.
American consuls in Russia, and the cotton experts of that country, estimate that Russia consumes annually nearly $50,000,000 worth of American raw cotton, an amount nearly equal to the total export to Russia of all American goods, according to United States government figures. That the government figures are misleading is due to the fact that they are figures of direct business only; and direct trade between the United States and Russia is, for geographical, transportation, and financial reasons, more or less hampered. American cotton is bought for Russia in London, Hamburg, Antwerp, Copenhagen, and other great European markets. The exports are credited in the United States to the ports mentioned, and while the ultimate destination does not affect the totals of American foreign trade, it does lead to wide-spread confusion as to the comparative value of the various foreign markets for American products. This is particularly unfortunate in the case of Russia, a country with which the United States has recently had some difficulty in the matter of a treaty of mutual trade and friendship. Judging from United States government statistics, American trade relations with Russia might be regarded as almost negligible; whereas in fact they are already of the greatest value and importance, to say nothing of the brilliant prospects of possible trade expansion in the near future. Even the government figures show a direct sale to Russia of nearly $50,000,000 worth of American goods, deducting the direct sales of cotton. With a known consumption of $50,000,000 worth of American cotton, this gives at least $100,000,000 as the value of American sales to Russia. Cotton, however, is not the only merchandise sold indirectly, and if other goods are handled in the same way to an equal amount, it is possible that the annual sales of American goods to Russia amount to nearly $200,000,000, or four times the amount allowed by United States official figures.
This correction would give Russia fourth instead of ninth place in the list of great buyers of American goods. This is the most striking illustration of the deceptive feature of government trade-statistics in determining the order of importance of foreign buyers of American goods, though there are other countries which suffer in the estimation of exporters for the same reason. As has been already stated, it was peculiarly unfortunate that this was so in the case of Russia, for those who, for reasons of their own, favored national retaliation against that country through mutual trade relations used United States government statistics to support their argument, and the American public naturally accepted these data at their apparent value. A final and accurate determination of the value of each foreign country as a market for American merchandise, a laborious and almost impossible task, would undoubtedly lead to interesting and unexpected results. It would not only make many changes in the list of the most important customers, but would immediately suggest possibilities of more direct trading, which would stimulate American rail, shipping, and financial interests, increase profits by cutting out the middleman, and in the end give added stimulus to American foreign trade.
One of the most serious difficulties that confront the American Government in its dealings with foreign nations is the inelasticity of the American tariff laws. The most sensible and scientific tariff law which the United States could have,—allowing that the principle of tariff for revenue and protection is to prevail,—is such rate of duty as may be deemed advisable, all things considered; an arrangement whereby a surtax could be imposed upon goods from countries discriminating against American merchandise, and a trading margin for treaty-making purposes, ranging from the normal rate of duty, as set forth in the customs laws, to absolute free trade between the treaty-making powers. There is little or no hope that such a law can prevail or will be formally advocated by any political party in power; but it is a hopeful sign that it has been seriously suggested and discussed by men prominent in the councils of the nation. That tariff laws will in time be formulated on that basis is likely, but such a statement reaches further into the domain of prophecy than is apparently warranted in the present temper of actual legislation. There is a simple truth, apparently often forgotten or ignored, and it is that to give is necessary, to be able to take, in all dealings between nations, as much as between individuals. All trading is in the end a compromise, presumably mutually beneficent and equally so. It rests with the wit and ability of the trader to see that he at least comes out even. It would be interesting to know just how far the late President McKinley intended to go in his advocacy of better foreign-trade relations for the United States had not his tragic death cut short his program. The last speech he made at Buffalo was crowded with significance of what might come later. It was in a sense as though he were only preparing the way for an important development of American fiscal policy in connection with foreign trade. Those who were in his closest confidence in the days just prior to his death have knowledge of an evolution that had taken place in his mind—a mind that had given more thorough thought and study to tariff matters than almost any other in America at that time. They firmly believe that at the moment the life of President McKinley ended, he had planned a pronunciamento in favor of concessions to American foreign-trade interests which would have startled the country, put the Republican party in line with the mass of the voters who desired tariff revision, and of which his Buffalo speech strongly advocating reciprocity in commerce was only the opening paragraph. Had he lived, this one thing might have made a vast difference in the subsequent fortunes of the Republican party; but when he died his place was taken by a man whose marvelous activities did not include an interest in the tariff. In fact, as he frankly expressed it, the subject “bored” him, as it does many others, unfortunate for the country as this may be.