Mediterranean area, $27,000,000; South America and the Far East, $15,000,000; and the West Indies and Central America, $7,000,000. EXPENDITURES OF UNITED STATES TRAVELERS IN INDIVIDUAL OVERSEA COUNTRIES The expenditures of United States travelers in individual oversea countries, estimated in previous years primarily upon the basis of reports from foreign representatives of the Departments of State and Commerce, may now be approximated, in the case of citizens and alien residents visiting European countries, by the use of collateral data taken from questionnaire returns. The pertinent information consists of (1) the respective percentages of United States citizens and of alien residents traveling to Europe in each class of steamship accommodation who visited a specified country and (2) the average number of days spent in each country by citizens and by alien residents traveling in each class. Summary data for all classes combined were given in tables 11 and 14. Together with average daily expenditures computed, by classes, for the European area as a whole, this collateral information makes possible approximations of the outlays of United States travelers visiting individual European countries. The resulting estimates, critically examined in the light of reports from foreign sources regarding the number and the expenditures of United States travelers in particular countries, formed the basis of the data shown in table 15 for the years 1935 and 1937.48 It should be emphasized that these estimates do not cover fare payments by United States travelers to, nor their incidental expenditures on board, vessels of European registry. They do not cover, therefore, total payments to European countries arising out of oversea travel by residents of this country. The estimates represent, in other words, the approximate outlays of United States travelers within the borders of each country. However, no allowances were made for shore expenditures by cruise passengers nor for outlays by United States citizens permanently residing in European countries. Table 15.-Expenditures of United States Travelers in European and Mediterranean Countries, 1935 and 1937 1 1 The estimates cover the expenditures of United States citizens and of alien residents of the United States, exclusive of the shore expenditures of cruise passengers and of the outlays of citizens permanently residing in European countries. Fare payments to, and incidental expenditures on board, vessels of European registry are not covered. 47 Average daily outlays by United States travelers in particular countries are not ascertainable, since questionnaire returns show only total expenditures in oversea countries. It is reasonable to suppose, however, that the per diem expenditures of travelers using a given type of travel accommodations would not vary greatly from country to country and that differences in average outlays by travelers using different types of accommodations, differences which do enter the computations, are much more significant. 48 The data requisite for similar computations for 1936 were not available. 49 The expenditures out of income derived in this country (and not covered in other balance-of-payments, items) by United States citizens permanently residing in certain European countries may be appreciable; but the amounts cannot be ascertained by statistical means. It appears from data for 1935 and 1937 that, among European countries, the principal recipients of United States travel outlays were, in the order named, the United Kingdom, Germany, France,50 and Italy. Estimated expenditures by residents of the United States in these four countries accounted for almost two-thirds of their total expenditures in Europe of approximately $70,000,000 and $100,000,000 in 1935 and 1937, respectively. NONCOMMERCIAL REMITTANCES AND CONTRIBUTIONS Noncommercial transfers of funds between the United States and foreign countries may be classified conveniently as so-called immigrant or personal remittances, on the one hand, and as institutional contributions by charitable, religious, educational, and scientific organizations, on the other. Personal remittances are broadly defined for balance-of-payments purposes, however, to include both remittances to foreign countries which are not gratuities and noncommercial transfers which are not, strictly speaking, immigrant remittances. Examples of remittances which are not gratuities are provided by transfers of funds to certain European countries by foreign-born residents of the United States for deposit, investment, or hoarding. These transfers are clearly in the nature of movements of capital but, classifiable nevertheless as noncommercial, personal remittances. Examples of remittances which are not immigrant remittances are to be found in wage and salary transfers between the United States and Canada and Mexico and in sums carried out of the country by emigrants. Personal remittances from foreign countries consist of gratuities from relatives in foreign countries to alien and other residents of the United States, of sums brought in by immigrants, of wage and salary transfers from Canada and Mexico, and of funds withdrawn on personal account from deposit or investment abroad. In recent years, estimates of so-called immigrant remittances to foreign countries have been reached by a progressive adjustment of a base figure established in 1931. This base was obtained by simple summation of estimates for individual countries reported by foreign representatives of the Departments of Commerce and State in that year; the yearly adjustment was effected on the basis of comparative 51 50 Previously published estimates of the expenditures of United States travelers in France were several times as large as those given in table 15. Calculations based upon questionnaire data indicate that these estimates were much exaggerated. On the other hand, earlier estimates of expenditures in a number of other countries, notably the United Kingdom, Germany, and Switzerland, appear to have been under statements. 411931 was selected as base year because it was not so remote as to make a detailed reexamination of the country estimates impracticable; because it preceded the period of exchange instability and exchange control during which estimates for a number of countries were particularly hazardous and often unavailable; and because estimates for the year were submitted in general by Foreign Service officers to whom the subject was not new. annual data supplied by principal domestic remitting agencies. In 1937, an attempt was made (for the first time since 1921 by any official or private agency) to establish the approximate total of noncommercial, personal remittances from the United States to other countries upon the basis of reports from all important domestic remitting agencies, including banks, steamship companies, travel agencies, and communications companies. These data from domestic sources, studied in conjunction with current reports from foreign sources, indicate that the volume of personal remittances has been considerably understated in recent years. This result was traceable, however, to the understatement of their volume in the base year rather than to any material error in the index of year-to-year changes in the item. Tentative revisions for 1936 and 1937 place the amount of personal remittances to foreign countries in the former year at $172,000,000 and, in the latter year, at $170,000,000. The estimate for 1936 represents in fact an adjustment of a revised estimate for 1931 upon the basis of comparative data obtained primarily from foreign sources. An adjustment upon the basis of comparative data supplied by principal domestic remittance agencies would yield, however, an aggregate of similar magnitude. The slight downward adjustment of the figure in 1937 was indicated by reports from domestic sources covering the bulk of personal remittances to foreign countries. The 1937 estimate is apparently substantiated by reported remittances through more than 50 domestic agencies (including the Post Office Department) 52 of $175,000,000. Even if allowance were made in the estimate of $170,000,000 for transfers which would not be covered in remittances reported by these agencies, such as the wages of Canadians employed in the United States, and in reported remittances for possible duplications, the two aggregates for 1937 still would be in approximate agreement. Personal remittances to the United States from foreign countries were tentatively estimated at $24,000,000 in 1936 and at $25,000,000 in 1937 upon the evidence, largely, of statistics of money orders certified abroad for payment in the United States. Net personal remittances to foreign countries were placed provisionally therefore at $148,000,000 in 1936 and at $145,000,000 in 1937.54 53 Data supplied by more than 125 charitable, religious, educational, and scientific organizations in the United States show that their aggregate contributions and remittances to foreign countries were approximately $33,000,000 in 1937, as compared with $32,000,000 in 1936. Other contributions of an extraordinary character raised the 1937 total to an estimated $35,000,000. Comparative data for the 2 years are given in table 16 by class of institution. Included in the miscellaneous category in 1937 are the sum of $543,000 expended for 52 It is probably impossible to demonstrate, upon the basis of the bare statistical record, that money orders certified in the United States for payment in foreign countries fall exclusively or primarily in the category of personal gratuities and that they may be included, therefore, among noncommercial transfers of funds without risk of serious error. On the other hand money-order transfers display no characteristics which would definitely exclude them, on theoretical grounds, from the class of personal remittances and do show certain characteristics which suggest that they belong in that category. 33 Money orders issued abroad for payment in the United States originate chiefly in this hemisphere, with Canada and the Canal Zone accounting for more than 50 percent of the total in 1936–37. The balance of remittances by postal money order in favor of countries in this hemisphere has been very small in recent years, and, in effect, the excess amount remitted from the United States to all foreign countries represents a net movement of funds to European countries. The table of personal remittances to individual foreign countries which has appeared in this bulletin for a number of years has been omitted pending a reexamination of estimates from foreign sources in conjunc tion with reported remittances, distributed by countries, through domestic remitting agencies. relief work by organizations registered with the Secretary of State for the purpose of soliciting and receiving contributions for use in Spain 55 and the amounts, which totaled several millions of dollars, according to press reports, raised by various organizations among Chinese residents of the United States for relief work and other purposes in China.56 Contributions received by the United States from foreign countries. are probably negligible."7 Table 16.-Institutional Contributions to Foreign Countries, by Class of Institution, 1936-37 Net noncommercial remittances and contributions to foreign countries were entered in the balance of payments of the United States at $180,000,000 in each of the years 1936 and 1937. INTEREST AND DIVIDENDS SUMMARY The interest and dividend items in the United States balance of international payments in 1936-37 were estimated as shown in table 17 (see also fig. 7): Table 17.-Receipts and Payments of Income on United States International Investments, 1936-37 Income to foreigners from other long-term investments in the United States. 30 1 In conformity with the regulations promulgated on May 5, 1937, pursuant to section 3 (a) of the Joint Resolution of Congress approved May 1, 1937, and the President's proclamation of the same date. See the mimeographed release of the Department of State, No. 54, February 1, 1938. 6 A small amount was expended in 1937 by the United States Government for the evacuation and relief of American citizens in China. 7 Approximately $134,000 was received from abroad for flood relief in 1937. The data in table 17 indicate that, despite the large decline in the net creditor position of the United States in recent years, this country still receives twice the amount it pays out on interest and dividend account. The United States received $330,000,000 more than it paid out in interest and dividends during each of the last 2 years. The income from portfolio investments abroad declined a little, while that from direct investments increased considerably. Dividends paid to foreigners also increased substantially, but, being based on a smaller total of investments, the total net receipts in the United States remained unchanged. In some respects the net income receipts are not a good measure of the net creditor position of a country. A good example of one of Figure 7.-Receipts and payments of income on United States international investments, 1934-37. its defects as a measure is the relation between the respective earnings and the principal amounts of United States short-term investments in foreign countries and foreign short-term investments in the United States. Although the income on the latter was only one-tenth of that yielded by the former, at the end of 1937 the principal amount was more than twice that of corresponding United States short-term investments abroad and much less subject to loss or shrinkage. This is an extreme case and one that does not apply with equal force to the long-term accounts. RECEIPTS IN UNITED STATES FROM INVESTMENTS IN FOREIGN COUNTRIES The estimated returns from United States investments in foreign countries are divided into three parts: (1) interest and dividends paid |