To the fighting
peoples and their colonies in normal times we send nearly seventy-eight
per cent of our exports, and from them we derive seventy per cent of our
exports. The Allies alone, principally England and her colonies, get
sixty-three per cent of these exports and send us fifty-four per cent of
all we get from foreign lands.
As the National Foreign-Trade Council of the United States points out:
"Any sweeping change of tariff, navigation or financial policy on the
part of either group of the Allies, and particularly on the part of the
Entente Allies, may seriously affect the domestic prosperity of the
United States, in which foreign trade is a vital element."
Why is this foreign trade so vital? Because, during these last two years
of world upheaval we have rolled up the immense favourable trade balance
of over three billion dollars. In peace time this would be paid for in
merchandise. But fighting Europe's industries, with the exception of a
part of England's, are mobilised for munitions. Therefore, these goods
have been paid for largely in gold.
This gold is now part of our basis of credit. When the war ends Europe
will make every effort that ingenuity, backed up by trade resource, can
devise to get that gold back. One way is through loans from us; the
other is by exports to us. Now you see why we must maintain our foreign
commerce.
Our huge gold reserve hides another menace: The war demands for our
commodities, paid for with the yellow metal, have increased the cost of
production; and it will stay up.
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