Table 4.-Foreign Trade of the United States, by Leading Countries and by Continents, 1926-37

ASIA

Evidence bearing upon the theoretical aspects of foreign trade is vided, on the one hand, by current statistics of trade between this country and the former gold-bloc countries (the currencies of which were exchanged against dollars in 1937 at much lower average rates than in 1936, and in the case of the French franc at a steadily falling rate) and, on the other hand, by data covering trade with countries with which trade agreements were in effect. Exports to France, the Netherlands, and Switzerland increased from $191,000,000 in 1936 to $268,000,000 in 1937, or by 40 percent, while imports from these countries increased from $136,000,000 to $156,000,000, or by only 15 percent. As a result, the balance of exports with the former gold-bloc countries rose from $55,000,000 to $112,000,000, that is, more than doubled.

Exports from the United States to 16 countries with which trade agreements were in effect in 1937 36 increased by 41 percent as compared with the 1936 aggregate, while exports to nonagreement countries increased by 34 percent. Imports from the same countries increased, however, by only 18 percent over 1936, as compared with an increase of 34 percent in imports from nonagreement countries. This anomalous result in the case of imports may be accounted for by the fact that the import commodities for which the demand in 1937 was exceptionally large are obtainable mainly from countries with which no trade agreements have been negotiated.

MONTH-BY-MONTH TRENDS

Imports of merchandise into the United States exceeded exports during each of the first 6 months of 1937, except May (see table 5). The increase during the period in imports was 45 percent and in exports 33 percent, as compared with the corresponding months of 1936; and the excess of imports reached $147,000,000-the largest import balance for any 6-month period in the foreign-trade history of the United States. This tendency reflected especially the heavy requirements for imported raw materials growing out of the further expansion of industrial production at home and, to some extent, the continued need to repair domestic shortages of certain agricultural products.

Exports were larger than imports by successively larger amounts in July-December 1937, and the balance of exports exceeded $400,000,000 for the half-year. The increase during this period in exports was 39 percent and in imports only 11 percent, as compared with the last 6 months of 1936; and imports in December 1937 were smaller than in December of the preceding year. This reversal of trend was related, on the import side, to the slackening of industrial activity in the United States during the second half of the year and to the consequent reduced demand for foreign crude materials and, on the export side, to sales abroad of domestic agricultural commodities and to a heightened demand from foreign countries for manufactured articles.

36 Canada, Costa Rica, Guatemala, Honduras, Nicaragua, Salvador, Cuba, Haiti, Brazil, Colombis, Belgium, Finland, France (and colonies, dependencies, and protectorates other than Morocco), Netherlands (Netherlands in Europe, Netherlands Indies, Surinam, and Curacao), Sweden, and Switzerland.

Table 5.-Foreign Trade of the United States, by Months, 1936–37

The officially recorded export and import statistics of the United States are not an exact measure of the cash claims involved in the international merchandise transactions of the country. In the first place, certain commodity transactions, such as the sale and purchase of ships and of bunker fuel, are omitted entirely from official customs figures. In the second place, certain other transactions are covered only in part by reported merchandise trade data. For example, receipts and payments arising from the provisioning and repairing of ships and from parcel-post exports and imports 37 fall into this category. Furthermore, until the repeal of the prohibition amendment, payments for smuggled liquors represented a substantial addition to official statistics of imports. Allowances must be made also for diamonds and jewelry brought into the country surreptitiously to evade the payment of duty.

The aggregate of merchandise adjustments of these two types showed a net export or "credit" balance of $37,000,000 in 1937, as compared with a "credit" balance of $25,000,000 in 1936. In the case of some items-for example, bunker-fuel sales and purchases 38 statistical data were obtained. In other cases only partial data were at hand, while in certain instances neither actual figures nor bases for satisfactory estimates were available.

37 Unrecorded parcel-post shipments are a subject of special study by the Finance Division.

38 As in 1936, data on fuel purchases abroad by United States vessels were obtained by the Finance Division through the cooperation of the United States Maritime Commission.

A third class of merchandise adjustments, consisting of corrections of certain recorded trade figures for balance-of-payments purposes, presents both analytical and statistical problems which are now subjects of special study by the Finance Division. The possible overvaluations or undervaluations in export and import declarations constitute one of these problems. Other officially reported merchandise data represent transactions which do not involve the international transfer of funds. For example, domestic corporations exploiting properties in foreign countries often import the products of their properties and employ all or a large part of the proceeds in meeting administrative expenses of their home offices. Imports of copper from American mines in Chile, sugar imports from United Statesowned plantations in Cuba, petroleum shipments to this country from wells in Mexico and Venezuela operated by American interests, and pulpwood and newsprint received from United States properties in Canada all exemplify this type of import transaction. The current investigation of the problems involved in the proper treatment of merchandise transactions for balance-of-payments purposes was outlined in the introduction to this bulletin. (See section on "Merchandise Adjustments.")

FREIGHT AND SHIPPING ACCOUNT

Estimated receipts from foreigners for freight and shipping services in 1937 were $107,000,000, as compared with $68,000,000 in 1936. Corresponding payments by the United States rose to $210,000,000 in 1937 from $129,000,000 in the preceding year and brought net payments to foreigners on freight and shipping account to $103,000,000, an increase of $42,000,000 over the net figure of $61,000,000 in 1936. The detail of the estimates for 1937 is given below:

RECEIPTS

Receipts of United States vessels for the carriage of United States exports_ Receipts of United States railroads for the carriage of goods in transit across United States territory ___

Receipts of United States railroads for the carriage of exports to Canada from inland shipping points to the border or to lake ports-

Total...

Millions

of dollars

65

8

34

107

PAYMENTS

Payments to foreign vessels for the carriage of United States imports (net). Payments to Canadian railroads for the carriage of imports from inland shipping points to border or to lake ports.

167

24

Payments to Canadian railroads for the carriage of United States goods in transit across Canadian territory - - .

19

Total..

210